PHARMACEUTICAL MARKETING

Authored by

Prof. K. Ravindran

Pharma Marketing

2

Contents

1. Overview of Pharmaceutical Industry2. Indian Pharma Industry3. Pharmaceutical Marketing

Over view of Pharmaceutical Industry• A pharmaceutical

company whose focus is to:• Research• Develop• Manufacture• Market drugs in the context of healthcare. P

harm

a M

ark

eti

ng

3

They also deal in generic as well as branded medications.

•What do they research?

•For e.g.

Pharm

a M

ark

eti

ng

4

Insulin (1920)

Penicillin (1930)

How do they develop and grow the industry?

Pharm

a M

ark

eti

ng

5

• A systematic and scientific approach;

• Studying human biology (DNA) and

• Sophisticated manufacturing techniques.

The Marketing Impacts:

• The global spending on prescription drugs topped almost

US$ 845 bn. expected to reach US$ 880 bn. by 2011

Pharm

a M

ark

eti

ng

6

Demand for nutritional supplements and alternative medicines created new opportunities and increased marketing activities in the industry.

• In 2004, the pharmaceutical market worldwide comprised roughly:

Country Market Share

U S 45%

Europe 25%

Others 30%

Pharm

a M

ark

eti

ng

7

•A single drug called Lipitor (cholesterol pill) from Pfizer with an annual sales of $12.9 billion.

Pharm

a M

ark

eti

ng

8The Second The Third

•New drugs hitting the market have fallen drastically, also the period of exclusivity has shrunk.• This has made the brand name drug

makers in the US to focus more on marketing.

Pharm

a M

ark

eti

ng

9

Top 12 Pharma Companies by Sales 2009

Rank Company Country Revenue in UD$ millions

1 Johnson & Johnson United States 63,747.0

2 Pfizer United States 48,296.0

3 GlaxoSmithKline United Kingdom 44,654.0

4 Roche Switzerland 44,267.5

5 Sanofi-Aventis France 42,179.0

6 Novartis Switzerland 41,459.0

7 AstraZeneca United Kingdom 31,601.0

8 Abbott Laboratories United States 29,527.6

9 Merck United States 23,850.3

10 Wyeth United States 22,833.9

11 Bristol-Myers Squibb United States 21,366.0

12 Eli Lilly United States 20,378.0

Pharm

a M

ark

eti

ng

10

Indian Pharmaceutical Industry Overview

• The Indian Pharmaceutical sector:• Highly fragmented• With more than 20,000 registered units• The leading 10 pharmaceutical companies control

36% of the market• The market leader holding nearly 7% of the market

share• It meets around 70% of the country's total drug

demand.

Industry is estimated to be worth $ 12 billion, and growing at about 8 to 10 percent annually.

Pharm

a M

ark

eti

ng

11

• In India Pharmaceuticals industry faces:1. Severe price competition2. Government price control (DPCO).

•Added to it the process patent application; •Companies will need strong R&D

capabilities as well as innovative marketing strategies to emerge as winner.

Pharm

a M

ark

eti

ng

12

Top 10 Pharma Companies in IndiaRank Company Name Revenue 2010

(in crores)

1 Abbot Labs 3,360

2 Cipla 2,507

3 Ranbaxy 2,270

4 GSK 2,015

5 Zydus Cadila 1,800

6 Sun Pharma Ind. 1,790

7 Alkem Pharma 1,600

8 Mankind Pharma 1,556

9 Pfizer 1,525

10 Lupin 1,307

Pharm

a M

ark

eti

ng

13

Major Export Markets • USA is the largest export market (13%),

followed by Russia (8%), Nigeria (7%)• Export accounts for nearly 32% of the total

revenues and• Generic drugs constitute 90% of the

exports

Imports• Germany is the country from where largest

drugs and pharmaceutical imports are made, followed by Switzerland and USA.

Pharm

a M

ark

eti

ng

14

15

Marketing means the whole business seen from the point of view of the final result, i.e. from the customer's point of view.

- Drucker

Pharmaceutical Marketing in India

It works in this way:

•Market in India is prescription-driven and branded generic.•80% Prescription market•20% Institutions/ hospitals and

dispensing doctors.•The greatest market potential exists in interior and rural markets, where growth is estimated at 25% per annum

Pharm

a M

ark

eti

ng

16

•A successful marketing program must have the following:•Market research• Right marketing mix (4 Ps)• A quality product• Right price• Strong dose of promotion• An extensive distribution network (place)

Pharm

a M

ark

eti

ng

17

Marketing Strategies Adopted in India

• India has over more than 39 million doctors• A doctor on an average may meet 15 MRs, each discussing

four or more products in a single day.

18

Mfgr. • The producerDoctor • The intermediary

Patient

• In this scenario, getting the doctor to remember – let alone the prescription – will be great challenge to the company’s marketing representatives.• The easiest way of creating brand

awareness / loyalty among physicians is through MR’s visits and persuasion to doctors on a regular basis• Doctors are the key decision-makers and

the success of a drug depends upon its level of acceptance among the doctors 19

Sustained promotion pays

• In India, marketing of prescription pharmaceuticals through mass media is not permissible

•The company’s MR becomes the chief link between the company and the doctor, often being described as the company’s “ambassador”

Pharm

a M

ark

eti

ng

20